PGA Tour vs. LIV Golf: Department of Justice investigates possible antitrust violations

The investigation shows the US Department of Justice is watching the PGA Tour’s battle to retain players in the face of new competition from Saudi Arabia-backed LIV Golf circuit

The Justice Department is investigating whether the PGA Tour engaged in anti-competitive behavior in its fight against the burgeoning Saudi-backed LIV Golf circuit, the PGA Tour confirmed to The Wall Street Journal.

According to a person familiar with these inquiries, players’ agents have received inquiries from the DOJ Antitrust Division regarding both the PGA Tour’s bylaws governing player participation in other golf events and the PGA Tour’s actions in recent months related to LIV Golf .

The questions send a clear signal that the Justice Department is watching the fight that has divided professional golf and which both sides expect will eventually end up in US courts. Such an investigation would normally involve instructing the data subject to freeze all relevant communications, both internal and with third parties.

A PGA Tour spokesman said he was aware of the investigation – and confident it would prevail. The Justice Department declined to comment.

Since the debut of LIV Golf, funded by Saudi Arabia’s sovereign wealth fund, the PGA Tour has suspended players who chose to participate – a punishment LIV has attacked as anti-competitive. Some of these players have decided to retire from the PGA Tour.

The advent of LIV Golf and the extraordinary money behind it have thrown the sport into turmoil and financial upheaval. LIV offers $25 million in prize money at its tournaments – far more than is currently offered on the PGA Tour – in addition to the seemingly huge sums top pros get for simply registering.

The PGA Tour has responded by topping up their purses at select tournaments and creating alternative routes, including new proposed international events, to further line players’ pockets. But even the tour boss admits it can’t compete with the Saudis’ box offices.

“If this is an arms race and the only weapons here are dollar bills, the PGA Tour can’t compete,” said PGA Tour Commissioner Jay Monahan in June. “The PGA Tour, an American institution, cannot compete with a foreign monarchy that spends billions of dollars [an] try to buy the golf game.”

That money could also become part of an antitrust case, some lawyers said, if LIV Golf argued that PGA Tour rules forced them to spend more to do business.

This is not the first federal investigation into PGA Tour practices. In 1994, the Federal Trade Commission prosecuted two PGA rules – one prohibited golfers from attending a non-PGA event without the commissioner’s permission, and the other related to their appearance on televised golf programs. By 1995, the FTC had withdrawn.

“It wasn’t unexpected,” the PGA Tour spokesman said of the new probe. “We went through this in 1994 and are confident that a similar result will be achieved.”

The tour’s policy review typically focused on the areas explored in the mid-1990s – both relating to the current struggle with LIV. The PGA Tour bylaws suggest that players are still not allowed to participate in other televised golf events without the approval of the commissioner.

There are also a number of rules that require players to apply for a clearance to play in tournaments that conflict with PGA Tour events. Players are eligible for up to three such releases per season, and no such releases will be granted for North American events. When players requested these releases last month to play at the first LIV event outside of London, they were denied – resulting in the suspension of those who did attend.

Critics have called these practices anti-competitive. And Greg Norman, CEO and commissioner of LIV Golf, has boasted of bringing “freedom to agency” to golf. A LIV spokeswoman initially did not comment.

Since LIV Golf has been trying to court players, it has also raised the possibility of a scenario like this. Earlier this year, LIV had sent a letter to players and agents accusing the PGA Tour of monopolistic behavior, writing that if the PGA Tour were to ban players who joined LIV, “the federal government would probably do it.” , the PGA to investigate and punish Tour’s unlawful practices.”

“There is simply no accepted justification for prohibiting independent professional golfers simply from contracting to play professional golf,” the letter reads.

The DOJ investigation predicts what could become a protracted and multifaceted legal battle in professional golf. The LIV Golf Circuit or the players who left the PGA Tour could face an antitrust lawsuit in the United States. The Department of Justice could consider such a case with an expression of interest or pursue its own actions.

One of the notable developments in this area came just last week when a handful of LIV golfers challenged their bans from one event – and won a stay. The DP World Tour, also known as the European Tour, had banned LIV players from entering the Genesis Scottish Open, which they sanctioned along with the PGA Tour.

But days before the event, a judge hearing golfers’ complaint through a dispute resolution service said those bans should be temporarily lifted.

LIV Golf – and the money behind it – has generated significant controversy and turmoil within the sport this year. In addition to lucrative participation fees, the circuit has offered record prize money to attract top professionals.

Superstar Phil Mickelson faced significant backlash earlier this year after posting comments saying he was willing to do business with the Saudis despite the country’s human rights record because he was unhappy with the way the PGA Tour was working .

Mickelson spent months away from golf following the firestorm. When he resurfaced, it was at LIV’s debut event outside of London.

He is among a growing list of big names to sign with LIV, including Dustin Johnson, Bryson DeChambeau, Brooks Koepka and Patrick Reed. Many of these players are not only dealing with the consequences of the PGA Tour, which suspended them, but also with their own sponsors, who in some cases have stopped working with them.

Their involvement with the Saudis has also drawn criticism from activists, including the families of 9/11 victims.

– Mark Maremont contributed to this article.

Wall Street Journal

https://www.codesports.com.au/golf/justice-department-investigating-pga-tour-over-potential-antitrust-violations-in-liv-golf-battle/news-story/5f0cf6f2bb43feb3ef55a9813ebaace8?nk=e80891c4aa9091b1c752fa455c6f98d7-1657579987 PGA Tour vs. LIV Golf: Department of Justice investigates possible antitrust violations

Nate Jones

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